Citi Comments on Carter's Acquisition of Bonnie Togs

Carter's, Inc. CRI announced that it will acquire Bonnie Togs, “a children's apparel retailer in Canada, for a total of up to $98M,” Citi reports. “We estimate the deal is valued at a 0.9x P/Sales multiple and a 6.9x EV/EBITDA multiple, which is reasonable given our average mean for retail acquisitions is P/Sales of 0.9x and EV/EBITDA of 8.8x,” Citi writes. “CRI has recently accelerated its focus on international expansion with the new SVP of international and now its acquisition of Bonnie Togs. “We believe there is significant opportunity for CRI to expand its international business, as it is evident that both the Carter's and OshKosh OSK brands resonate well with international customers (25% of eCommerce sales coming from international). We would not be surprised if CRI continues to acquire the retail stores of its licensees where it makes sense.” Carter's closed Wednesday at $27.48.